Oracle's Shares Plummet $80 Billion Amid Fears of Artificial Intelligence Bubble. The tech giant's disappointing quarterly results have led to a 15% decline in its shares, wiping out approximately $80 billion from the company's value.
The downturn in Oracle's stock price comes after the company reported lower-than-expected revenues for the latest quarter, with sales at its cloud computing business growing at a slower pace than forecast. The company's infrastructure business also saw revenue growth of 68%, which was slower than expected.
Oracle's shares were already under pressure due to the company's massive investments in artificial intelligence (AI). In response to disappointing results, Oracle raised its forecasts for AI-related capital expenditure, with an expected increase of 40% to $50 billion. The majority of this investment will be dedicated to building data centers.
The company's long-term debt has surged by 25% over the past year to $99.9 billion, causing concerns about investor confidence in the business. Even the cost of insuring its debt rose on Thursday as investors expressed their disappointment with the results.
Analysts have warned that there is a growing bubble in AI-related stocks, fueled by optimism about the potential for AI technology. However, policymakers and business leaders have also sounded warnings that stock market valuations could tumble if investors are disappointed by the progress or adoption of AI technology.
In related news, shares in chipmaker Nvidia fell after Oracle's results, as the company is seen as a bellwether for the AI boom. The dip in Nvidia's shares has further fueled concerns about the AI bubble, with many experts warning that the market may be due for a correction.
Despite this, some analysts have expressed caution, arguing that strong contract growth was not enough to placate fears about AI and the massive investment required by companies to build AI infrastructure. Others have pointed out that the growth of Oracle's customer contracts is largely driven by commitments from major players like Meta and Amazon, which raises questions about the sustainability of this model.
As investors continue to navigate the complex landscape of AI-related investments, it remains to be seen whether the optimism surrounding these technologies will prove short-lived or if the market will eventually correct itself.
The downturn in Oracle's stock price comes after the company reported lower-than-expected revenues for the latest quarter, with sales at its cloud computing business growing at a slower pace than forecast. The company's infrastructure business also saw revenue growth of 68%, which was slower than expected.
Oracle's shares were already under pressure due to the company's massive investments in artificial intelligence (AI). In response to disappointing results, Oracle raised its forecasts for AI-related capital expenditure, with an expected increase of 40% to $50 billion. The majority of this investment will be dedicated to building data centers.
The company's long-term debt has surged by 25% over the past year to $99.9 billion, causing concerns about investor confidence in the business. Even the cost of insuring its debt rose on Thursday as investors expressed their disappointment with the results.
Analysts have warned that there is a growing bubble in AI-related stocks, fueled by optimism about the potential for AI technology. However, policymakers and business leaders have also sounded warnings that stock market valuations could tumble if investors are disappointed by the progress or adoption of AI technology.
In related news, shares in chipmaker Nvidia fell after Oracle's results, as the company is seen as a bellwether for the AI boom. The dip in Nvidia's shares has further fueled concerns about the AI bubble, with many experts warning that the market may be due for a correction.
Despite this, some analysts have expressed caution, arguing that strong contract growth was not enough to placate fears about AI and the massive investment required by companies to build AI infrastructure. Others have pointed out that the growth of Oracle's customer contracts is largely driven by commitments from major players like Meta and Amazon, which raises questions about the sustainability of this model.
As investors continue to navigate the complex landscape of AI-related investments, it remains to be seen whether the optimism surrounding these technologies will prove short-lived or if the market will eventually correct itself.
It's clear that investors have been getting too caught up in the hype around AI and its potential to disrupt everything 
. We've seen companies like Oracle throwing massive sums of money into building data centers and infrastructure, but are we really seeing any tangible results? 
. I mean, what if the tech just isn't there to back it all up? And now we're seeing chipmaker Nvidia's shares dip after Oracle's results... that's gotta be a red flag 
.
. I'm not sure if the market will correct itself anytime soon, but it's definitely overdue for some cautionary measures 
.
It's like the whole thing is built on shaky ground. And don't even get me started on the debt – $99.9 billion? That's crazy talk! 
What if Oracle can't pay that off? The ripple effect would be huge.
Nvidia takes a hit when Oracle does, and now we're talking bubble burst? 
Or is there something more sinister at play here? I'm not saying conspiracy theories or anything, but... you get my drift. 
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... I'm calling it now: AI-related stocks are due for a major downturn 
. The bubble thing is kinda worrying though...I don't want investors to lose their shirts over this AI hype 
.
...it's a harsh reminder that hype can quickly turn into a bubble. We've all been there, chasing after something shiny and promising, only to realize it's not as solid as we thought 
. The key takeaway here is to separate the real value from the hype. Don't get caught up in the excitement of new tech just because everyone else is jumping on the bandwagon 
. Take a step back, do your research, and make informed decisions that align with your values and risk tolerance 
$80 billion is a huge amount of cash! The fact that their AI investments are not paying off as expected is super concerning... and it seems like the whole tech industry is feeling the heat 
Chips maker Nvidia just got hit hard too after Oracle's results. I mean, we all know about the AI bubble and how overhyped it's getting 
But at the same time, Oracle's customer contracts are growing strong... that's a good sign, right? 
. And Nvidia's dip in shares is like, a major red flag 
. It's just a shame that investors are putting all their eggs in one basket and it might not pan out as expected 
.